Would You Turn Down More Money For Happiness?

1185031_10100224600880779_692606125_nLast week I was quasi offered a job I had to turn down. The job was at my dream location, more money, great staff and highly recommended by a classmate of mine.

But I still turned it down.

If you’re not familiar I’m a dental hygienist and would love to work at this particular office but not under the proposed conditions. They were looking for someone to work three, twelve-hour shifts, 8am-8pm Monday, Tuesday and Wednesday (actual hours probably 7:45-8:15). If I wasn’t married with a young child I probably wouldn’t think twice but I’m at a point in my life where I have to consider so much more than money and professional satisfaction. Twelve hour shifts means I basically wouldn’t see my daughter three days a week. It also means my husband is solo after work dealing with a busy two-year-old to play, cook dinner, bathe and bed. Impossible? No. Seriously inconvenient? Yes. It’s much easier to have two people than one. These hours would also mean little to no time for me to get stuff done those days and more stress the days leading up to them knowing they’re approaching.

I can already predict the added stress it would put on the relationship with my husband (both as my husband and expectations as a father). Long story short, it’s not conducive for my life.

I potentially walked away from an additional (net increase) of about $650 more per month, working one less day per week than I currently am with two ”open” days to fill-in, potentially increasing my income even further (if I wasn’t already dead tired). Am I nuts?

I know myself enough to know I would resent the job and wouldn’t last a long time. Physically, a twelve-hour shift in dentistry is very difficult, combined with lingering postnatal carpal tunnel pain, I’d be a miserable, sore, cranky mess by Wednesday night. Not the mom or wife my child or husband needs.

I make it seem like an easy decision on ‘paper’ but it wasn’t. I was incredible tempted to suck it up and deal with the difficulties if it meant I would be able to put more money towards our debt. This was a moment I had to realize losing myself in a job just to pay debt off faster wasn’t going to do favors for anyone. I’m bummed  I won’t be working at this particular office but so glad I have a job I love that I can wait on until the perfect opportunity presents itself or it may have caused me to make an irrational decision.

Have you ever turned down more money for your overall happiness?

How I’m Able to Put $2,000+ Towards Debt Every Month And Still Have a Life

ID-100128308 (1)After many months of thinking about doing them, I started my debt repayment posts in January 2014. I calculated that I would need to put a minimum of $2,068 per month towards our non-mortgage debt if we wanted to be debt free in 50 months. Four months into tracking and we’re not too far off our goal. February had a few setbacks and we were short by about $500, not a huge amount to make up at the end of the day. I’ve received a few comments and emails about how we’re able to reach our goals every month.

Our Careers

To start, both my husband and I have good, stable jobs, with a lot of room to grow. We’re both young in our professional careers and my husband especially has a lot of potential in terms of professional growth. In the last two years alone he’s gone up by $5.00/hour with potential on the near horizon for even more raises. Having reliable income is the main source of our monthly payments. There is no way I could even fathom making these sorts of payments if I wasn’t in a good-paying career.

While I took on more debt to get my job (through further education) I have no regret about it. While I went into more debt I entered the job force and immediately had many job prospects and a life-long career. If you’re in debt and don’t have a good stable job, get one. I understand this sounds easier than it actually is, but do everything in your power to make it happen. Speak to career counselors, look into post secondary options, exhaust every option.

Budget Our Extra Debt Payments 

We ”spend” every single penny we make each month. I’ve set up our budget in such a way that even extra debt payments are established as a ”bill”. If I just let the money sit in our account until the end of the month to roll over it would be absorbed or spent somehow. Because my pay varies (I’m paid hourly) our budget is based upon the least I would make on average if it’s more than my estimated minimum (I sometimes work an extra day or don’t take a lunch break), our very fluid budget is adjusted to account for an extra debt payment ”bill”. Working one extra day per month along gives us an extra $200 to play with on average (less daycare etc). The change in my income alone and living on a budget that is a low estimate helps a lot in making our $2,000+ goal every month.

Because we’re both paid bi-weekly I don’t budget the two ”extra” pays every year we get allowing us to put some of this money towards our debt as well.

Make More Money

There’s no way around it. We needed to make more money. My main source of additional income is my online income through this blog and freelance writing, for this I am eternally grateful. My husband also writes online and makes a little bit himself. I also have the option of working more at my current job. When I went back from maternity leave, I started working a four day work week to give a little more work/life balance. The beauty of this being that I have one day per week I can work if we need me to either at my office or as a fill-in. I like that I have this ”card in my pocket” if I need to.

While we could be debt free even faster by me working five days per week it’s not something either one of us is interested in right now. I’d rather balance my life and work on debt than have a stressed out life just to be debt free faster. Paying off debt is a very personal journey. You have to figure out what you need to do and make it happen. For us it was making the most of our monthly budget and supplementing it in any way possible. Accept that you’ll have good months and bad months. Moving in the right direction is the most important thing!

*****

Picture adapted from one found here

I Don’t Make Mistakes. I Make Learning Opportunities.

mariaI came across this quote the other day and immediately related to it (it also reminded me of Wendy’s post about letting go of debt guilt<< Read it, one of my favorite posts ever).

So much about the financial journey that we’re on is mental. We could sit around and sulk about the situation we’re in, sort of like we did for three years before getting real about it, or we could seize this learning opportunity and change our lives a full 180 degrees.

Mistake #1: Too Much Credit, Too Early

By the time I was in third year of my undergraduate degree, I had access to almost 50k in credit between my lines of credit for school and credit cards. 50k when I was making like $11.00/hr at my part-time job. This is insane to me right now but I didn’t know any different. This was also during a time in Canada where credit limits were increased without consent. I’d look at my statement one month and by the next month my limit was increased by 2k. While credit cards companies are no longer allowed to do this, you must request increase yourself and go through credit check, I’ve learned that I should have called as asked them to lower it back down to original level. I also would not have signed up for every credit card offer that came my way! Credit card companies loved me.

Going for forward we will only have one to two modest credit limit cards (maybe a total of 5-6k) so temptation isn’t there. I will teach my daughter about doing research on your first credit card and the importance of managing it responsibly because, after all, opening and maintaining your first credit card helps your credit report!

Mistake #2: No Savings

I’ve been working since the age of 15, I’ve never really saved. I thought about it a lot but I never did anything about it. It seems so stupid but I just didn’t know how. I’d save a few hundred for some trips, paid for our wedding in cash by settling a bill as soon as it came in, but I have come a long way. I’ve learned my lesson and we have some savings now, even while in debt, especially while in debt, since we can’t afford to owe anyone else money if there was an emergency!

Going forward I know how to save and it starts with just doing it! Anything to start, then make more concrete goals. I know exactly how much money we need each month to meet our goals . When our debt is paid off we will have a nice chunk of money to allocate to retirement. We have also already started a savings for our kiddo. Again, while we’re paying our debt off we start small but as our debt decreases we will be able to bump it up a little. We’ll also teach her the importance of saving when the time comes for her to start earning money. Save some money as soon as you make it and have any opportunity to spend it!

Mistake #3: Thinking If You Can’t Give 100%, Don’t Try at All

The biggest reason I was overwhelmed with our debt at the beginning was that I was totally overwhelmed with ever how to start. I thought, if I can’t pay it all off immediately, or at the very least in increments of thousands of dollars per month why bother? Just two months ago I made an additional payment of $44 and change because I could, and it felt good.

It took me about a solid year of educating myself, reading blogs and other resources like Gail Vaz Oxalade’s books (a lovely Christmas gift from hubby) but I finally know, what we need to do to make our debt disappear and the knowledge alone is enough fuel to keep me going. Ignorance is not bliss when it comes to debt.

I beat myself up sometimes for approaching 30 and just now figuring out what I need to do, like I wasted five years of my life, but i guess it’s not all wasted if I had a great learning opportunity.

Why Renting While in Debt is a Good Idea

The other night I was out for a solo evening walk (a very unusual feeling, I didn’t realize how out of touch I am with myself. I walk all the time but always with my daughter or friend, it’s been a long time since I got out alone). Anyway, on my walk I walked past a new apartment building close to our home that was advertising rental unit available. I couldn’t help but reminisce about our apartment rental days and how nice of a spot this particular building was. I also couldn’t stop myself from dreaming about selling our home and renting again. Yup, I said it. At this stage in our lives, sometimes I would rather sell our home and become renters again than be homeowners.

There is a lot I love about being a homeowner, but home-ownership isn’t always what it’s made out to be, especially if becoming debt free is a big goal.

Increased Bills

When we were renting we had very limited utilities. In utilities alone, we have an increase of about $250 per month with homeownership. We also now have stuff like property tax and general home maintenance to pay for. I figure being a homeowner costs us about $500 more per month than renting, even if we were to get a larger apartment than we had given that we now have a child and need for more space.

Maintenance

General home maintenance is time consuming and expensive. Some of it, like gardening, is enjoyable for me, but it still consumes my time that I could gladly fill with other stuff. I miss the days of being able to call the landlord and getting them to fix whatever the problem was. I can see how condos may be appealing. I certainly don’t want to spend the required money for our new front door and new bathroom taps, but we don’t have choice since we’ve decided to make this our home we need to pay the price.

Extra Money Designation

Logic would say if you’re trying to get out of debt, any extra money, such as a tax return or in my case freelance income, should go towards said debt, but when you’re a homeowner sometimes you just can’t. This week one of the taps in our bathroom broke and we need to now replace it. An expense we didn’t want to have to spend. I’ve already mentioned our tax return will likely be going towards a heat pump as well. This is extra money that, had we been renting would have been able to go towards debt no questions asked.

Like I said, I love being a homeowner for the most part, but if it was feasible I would sell our home and rent again until we’re debt free and saved a large (20%+) downpayment for our next home. This is a pipe dream for many reasons but it’s another reminder where I wish we hadn’t rushed into homeownership so hastily sometimes. Live and learn.

Do you rent or own? What do you love or hate about it?

 

Sometimes You Need To Spend Money To Save Money: Heat Pump Edition

It’s true, sometimes you need to spend a little money to save even more money. This is a situation we’re currently faced with. We’ve decided that we’re going to start saving for a heat pump for our house. A ductless unit that will hopefully be installed before end of July when it starts getting really hot here (August is usually brutal). My husband works in a sector of the engineering industry that deals with these types of units a lot (though usually on a commercial level). He knows pretty much everything about them. We didn’t think we’d bother installing one in this house, remembering that we bought this house expecting to be here 5-7 years when in reality it will be closer to 10 years (another 4-5 years likely).

We’ve decided to install one for a few reasons. The biggest reason being money. I figure with one installed we will save at least 40% off our power/heat bill every year. We have electric heat and currently spend about $3,000 per year for electricity. Gross eh? The heat pump will cool our house in the summer and warm it in the winter in a significantly more energy-efficient manner than our current set up.

As explained by Wikipedia: Heat pumps are designed to move thermal energy opposite to the direction of spontaneous heat flow by absorbing heat from a cold space and release it to a warmer one, and vice-versa. 

My husbands grandfather installed a unit almost identical to the one we’re looking at a few years ago, had a similar electric heating situation and saw a decrease of about 50% off his electric bill every year since.

Because of where my husband works he can buy these units at cost and knows certified installers. We figure worst case, it will cost us about $2,000 to purchase and install the unit (this includes having a licensed tech to install and electrician to wire it). A $2,000 upfront cost and an immediate savings of about $1,200-$1,500 per year, EVERY year. The unit pays for itself in less than two years. Seems to be a bit of a no brainer right? Also, when we go to sell our house I know it will be an added feature. I’d certainly be more inclined to buy a house with a heat pump than one without, wouldn’t you?

This is where we plan on designating a big chunk of our tax return. It wasn’t a big return to begin with but enough that it gets the savings started. I’m hoping we’ll have enough saved by July. In the summer when it’s really hot at night we sometimes go to hubby’s grandfathers house to sleep because our home is too stifling hot (we don’t have an A/C unit) I’m already picturing a cool oasis in our basement :)

We’re still in the planning stages and honestly haven’t even had someone out to check our house out but hubby doesn’t foresee any issues so I’m excited!

Do you have a heat pump? Do you think this is money well spent?

The Benefit of Hiring a CGA to Help With Our Taxes

 

Since my first job, I’ve always done my own taxes. Honestly for the average, straight forward return I can’t imagine why anyone would ever pay someone else to do it. This year however we has the first big change with me claiming freelance income. It took me a few weeks to gather all the info I thought I would need, and quite a few emails with fellow Canadian bloggers, but I finally gathered all the info I thought I would need.

Lesson #1, keep good records!

I opted to use a trusted tax software and after inputting all the information I had gathered, it came out with a net owe for our family. My husbands refund slightly offsetting my balance to pay. Though I was satisfied with my information, I decided at this point to find a CGA and get them to take a look at everything, confirming what I had done is right. I won’t lie. I had also heard of dream stories where the person brings the return to a CGA with a balance owing and with a few magic numbers being added, leave with a refund instead. I was somewhat hopeful…

Lesson #2, the yellow pages aren’t a dead commodity yet!

I have quite a few friends who work in different aspects of the finance industry but no general accountants. I didn’t have the first sweet clue where to start looking. At work one day during lunch I pulled out our yellow pages and just started calling. The first place I called (a larger firm) left me frustrated telling me help with returns starts at $375 and an hourly rate of $175 on top of that. Not what we were looking for. We wanted advice more than anything and weren’t interested in spending that much money especially since we already owed money!

I didn’t give up and called a few smaller places until I came across the guy we ended up going with. I instantly liked him on the phone, quickly explained what we were looking for and he was more than willing to help, bonus being could meet us after hours! He would charge us a rate if $75 for the hour and help us in any way we needed.

Lesson #3, spending money on professional advice is never a waste of money.

I have to be honest I went into the meeting thinking I knew everything and he was just going to confirm this, allowing me to sleep at night knowing I had done it right. The meeting was so much more than that! Though I was right with all the information I had gathered, some of my percentages were off. He was able to give us the confidence to increase some of the percentages (I was being too conservative with some things) and explain the reasons why. An example being internet. I was only claiming 50% of our internet bill saying 50% was for blogging related stuff and 50% being used for personal. He explained while we may use internet 50% of the time for personal usage that doesn’t matter because without any internet I couldn’t blog at all and therefore can claim 100% of internet.

He also explained that I shouldn’t worry as much about tiny details. I’m being honest about claiming my freelance income and trying to pay CRA money. So many people in my situation would try to get away with  not claiming at all. He went over benefits of claiming our home office too, something I hadn’t even considered. The calculations we did regarding the home office were very respectable and within reasonable norms. All of this is info I wouldn’t have known unless I talked to someone who has done this as many times as a CGA.

We chatted for almost two hours and he charged us for 1.5 hours total. $130 later and we left his office feeling much better about our situation.

I input the changes we discussed in the meeting when I got home and we both came out with a refund! It’s nothing like refunds I’ve received in the past (some years upwards of 8k with student rebates) but it’s something,  I don’t owe which is enough for me! Especially since we weren’t expecting a refund at all, we’ve decided to put it towards a few things we need for the house (maintenance) rather than debt, a decision I’ll explain in another post :)

Though this was the most money I’ve ever spent to do taxes ($130 for CGA plus $30 for tax software) I learned so much! It was money well spent!

Has a CGA ever helped you with taxes?  Did it help?

March 2014 Debt Repayment. This One’s For The Record Books!

When I say for the record books I don’t mean in a good way. March was a real bitch. It was expensive with the unexpected $850 car bill, my best friends father died after a two year battle with ALS, a former co-worker lost a 26 year old son tragically and we were hammered with a snowstorm which meant some lost job income (I don’t go to work, I don’t get paid). Needless to say I’m ready for April but so far Mother Nature isn’t cooperating. We’re covered in snow and ice. Beyond ready for winter to thaw out a little.

View from living room window during last weeks storm

View from living room window during last weeks storm

With everything going on I wasn’t sure if I would be able to meet my target of putting at least $2068 towards debt but…. I did!

I put a total of $2133 towards debt in March. $65 more than minimum required (to be debt free in 48 more months)! If I’m being honest, I forgot to make the extra payment before the 31st and technically paid it in April but it was from March income so that’s how it’s getting organized in my books.

Looking forward, things start getting expensive. April is an expensive month for us with Easter and three important birthdays but we also have an ”extra” pay in April to help offset these costs. We don’t budget our two extra pays each year per se. We use them as we need them when the month approaches. In the fall our extra pay (they usually fall april/october) is always used  to pay for my licensing fee which is due in October ($700) and set aside the rest for Christmas. The upcoming spring extra pay this year will hopefully be for used for birthdays, making up the $525 shortfall from February debt repayment and rest in savings for our summer vacation. This of course will only happen if the world cooperates with me and just leaves me be for a while. Seriously.

How was everyone else’s month? How do you budget bi-weekly pay?

What Are Installment Loans Used For?

Installment loans are large sums of money that are paid off over time. It can be for purchases, an actual financial loan or lines of credit. The terms will vary on each loan depending on the terms of the client and your personal credit. There may also be administrative fees or finance charges applied on top of interest. It is important to read the fine print before agreeing to the loan.

Obtaining Credit

If you need a credit card or an approval for a purchase, an installment loan is the ideal option. You are able to pay credit off over time in small payments. The best thing to do when you get credit is to double or triple the payment. Always pay more than the minimum payment. What this does is pay down the amount of the loan more rather than putting more toward the interest than the loan amount.

Pay a Large Purchase over Time

A large purchase, such as a home or car often requires payments to be spread out over time. This is what an installment loan is for. Most consumers consider this to just be a mortgage or car loan. The term installment loan is foreign to them when it is referenced as an installment loan. It is rare to be able to purchase a home or car in one payment. The good thing about these loans is that you can pay a little extra each month, such as an extra $20 even, and it helps reduce what you are paying in interest.

Line of Credit

A line of credit is something that is generally offered through a specific brand. It may also be offered for equity or home improvement purposes. This type of loan is different as it is solely gauged by the creditor themselves and not an actual bank. Their terms are different as well as their eligibility requirements.

Installment loans are good to obtain, when you are able. Keep in mind though that the better your credit is to start with, the less interest you will end up paying. What you want to do is ensure that you have enough income to afford repayment beyond minimum payment requirements. This helps you to pay the loan down faster and pay less interest. Consider it as saving you money over time. Getting what you need, rather than what you want, is satisfying when you are not stressed with having to put forth lump sums of money at one time.

 

Are Your Financial Goals Preventing You From Reaching Other Goals?

weddingIf you’ve been reading this blog for anytime you already know that I’ve never let our debt stand in the way of doing things we want.

We had a wedding and honeymoon.

We’re homeowners.

We’ve traveled.

We have a daughter.

There are a lot of people who wouldn’t even consider doing any of these things until their debt, or other financial goals, were reached. Though we’ve accomplished every major milestone we have wanted while in substantial debt, without incurring anymore, there are a some aspects of my life that are affected because of our financial goals and I have to wonder sometimes if it’s worth it.

My Health and Exercise Goals

This may seem sort of silly but right now I am more interested in concentrating almost all of my efforts into this blog and my freelance writing then I am taking an hour to workout. Our goal is to be debt free in 48 more months and we’re already one full month behind because of our little tire incident that set us back a few hundred bucks. Since I work full time my free time is quite limited. I find myself putting my efforts into making more money and building my side income before my health/exercise. If I wasn’t so concerned about making more money it would likely be the opposite, ‘’me time/exercise’’ first, then blog. I’ve been trying to wake up earlier than I already do but my kid is an early riser as well so getting exercise done before she wakes is difficult. I may have to start waking at 5:30am though to get ‘er done but then I’ll be toast by 8pm which means zero blog and freelance time.

My Social Life and Me Time ”Goals”

Again, because I’m most interested in this blog and working towards making a freelance income goal every month, I’d much rather work in this come Friday night than waste time watching a movie or such. I still make time to maintain the relationships that are important to me with friends and family but without my freelance gig I’d have even more time to spend with them (but less money to do things…).  I feel like I do enough considering our situation but know when we’re debt free, I’ll still blog and write but at a much slower pace rather than under tight deadlines. It helps that my husband is the king of planning and loves having friends and family around so he’s the one that makes sure I get out of the house from time-to-time ;)

Our Home “Goals”

Don’t get me wrong, the house is far from neglected and we clean and maintain it. Nothing is broken and we’re aware of things that need to be taken of (like needing new doors for front and back doors) but my little painting project a few weeks ago, where we started re-doing our bedroom? The walls are still totally bare and probably will be for a few more weeks, if not months. We haven’t decided what we want to do on the large open walls and I haven’t had the time, nor have I made the time, to think about what to do. Again getting back to priorities, side income and building wealth trumps wasting time figuring out wall picture configurations. I used to love filling my free time with DIY projects and art.

Part of me feels like my priorities are a little backwards sometimes. I beat myself up over not accomplishing everything (pictures on walls, exercising an hour per day and sticking to a perfect meal plan all while freelance writing) but I’m human. I have decided that while we’re working towards debt freedom other things aren’t as important. I do what I can for exercise and constantly working on productivity to make the most of my free time. For me, that’s enough for now because I know how amazing our life will be in 48 months when we finally reach our goal.

Do you let your financial goals interfere with other aspects of your life?

Snowball? Avalanche? or Neither? Which is the Best Debt Payoff Strategy For YOU? Maybe Neither!

There are many ”expert” methods out there to help you tackle you debt. The two biggies being the ”Snowball” and ”Avalanche” methods but there are other, unique, methods too. We listen to other people all too often not looking at our own situation and analyzing it. Experts try and tell us that their method is the best and we listen to them. We, as a society, don’t question things enough.

Snowball Debt Repayment

This method, probably made most famous by Dave Ramsey, suggests organizing your debt payoff in such a way that you pay them off according to size from smallest amount to largest. The logic being we gain debt payoff momentum and are more encouraged to continue on in our efforts when we see results and gain the satisfaction of paying things off. The big drawback to this method being you could likely end up paying more in interest since interest rate isn’t taken into consideration when prioritizing.

If you’re the type of person who gets excited about paying something off in full (rather than just paying a balance down) this method will likely work well for you.

Avalanche Debt Repayment

Interest rate is taken into consideration with the repayment option. Organizing your debt from highest interest rate to lowest and start repayment accordingly. This method ensures you’re debt free and paying while paying the least amount of interest.

To me this method makes the most sense. While I understand the logic behind momentum gained with the snowball method, if you were to calculate potential interest paid between the two one may be inclined to switch methods.

Which is Best For Me?

Neither.

Snowball doesn’t work for me because I lose thousands in interest and I like the idea of paying as little as possible, as fast as possible.

Avalanche doesn’t work for me because my highest interest rate loan offers me a tax discount come April and my lowest interest rate loan is effecting my credit score so I want it eliminated ASAP.

Every debt repayment strategy needs to be personal and while both of these methods make sense in their own ways I need to look at my situation and realize that neither is exactly appropriate and guess what experts? I’m Ok with that. I’m Ok with not listening to your ”expertise” and I’m Ok with doing what is best for my family’s fiances. You should be Ok with challenging experts too.

We tend to get lost in hype over stuff. Again I will reiterate that both of these methods are good and the main goal of debt freedom is priority but it’s important that we don’t forget that they’re not the only ways though. If something someone else is doing doesn’t work for you, don’t do it, it’s just that simple. I’m going against the grain. I’m currently working on paying off one of the loans that offers me an income tax deduction because it’s like a thorn in my side and I want it gone. Then I will likely shift my financial efforts over to the 0% interest loan because it pisses me off. I don’t care that it’s 0% and I have 5.5% interest loans as well.

I’m paying off our debts according to how much the annoy me, not what the experts say. How are you working on your goals? Any other rebels out there?